Switzerland tops KPMG’s ranking for a second year; nine European countries included in the top 20.
The 2019 KPMG Change Readiness Index, released today, ranks 140 countries1 on how effectively they prepare for, and respond to, major change events. From geopolitics to technology to climate, the world is changing at a rapid pace. Which countries seem prepared for the opportunities? And which appear ill equipped to manage the risks? This edition of the report focuses squarely on the capabilities countries need to successfully address climate change and mitigate associated risks. The Index measures a country's capacity for general change, but KPMG's methodology shows that those same capabilities also dictate a country's preparedness for climate change.
The Change Readiness Index, now in its fourth year of bi-annual publication, answers these questions by measuring each country across three key pillars of capability: enterprise, government and people & civil society.
Timothy Stiles, Global Chair of KPMG's International Development Assistance Services, commented on the analysis: “Climate change is among the most pressing issues we face as a global society. Those countries failing to recognize the impact of climate change are likely to be unprepared for its growing costs, which will be levied on citizens, businesses and economies around the world. Our 2019 report aims to demonstrate that there isn't a one-size-fits-all approach to responding to major change.
Continued Stiles, “Our research highlights that too many nations can be reliant on either business, government or civil society to shoulder the responsibility for change readiness, but in our experience this doesn't yield the best long term results. True preparedness is when each segment of society - enterprise, government, and people and civil society - works in harmony toward a shared outcome.”
The top ten performing countries of the CRI remain largely unchanged from the 2017 report, with the exception of Norway, which has climbed from 11th to 8th place to replace Finland in the top ten. The UK remained in the top 10 and climbed to 8th place (from 10th), despite mounting political uncertainty surrounding Britain's decision to leave the European Union.
The EU performs above the global average in environmental sustainability compared to other regions. The 2019 Index, however, has found that Europe's financial sector is falling behind the global average and North America, and is performing marginally better than Developing Markets.
The US now ranks 13th (down from 12th) overall while Canada rose to 16th overall (up from 18th). Despite falling behind Europe on environmental sustainability, the US leads the globe in financial sector preparedness for change. North America is the clear global leader in the adoption of new technologies.
European countries are leading the way for Enterprise Sustainability, which looks at the private sector's role in rising to the challenge of national preparedness and response to climate change and environmental degradation. Measures for Enterprise Sustainability include CO2 emissions per unit of GDP, and the share of renewable energy in use by a country.
By contrast, naturally resource rich countries have performed poorly in Enterprise Sustainability. The best performing naturally resource rich country is Norway (#32) and the poorest performing is Russia (#135). This could mean that the private sector in resource rich countries is not taking steps to diversify their economies away from resources like oil and gas to mitigate climate change and environmental degradation.
The 2019 Index also revealed that countries most susceptible to climate risks are mostly low income and lower-middle income countries. Less mature economies like Chad, South Sudan and Afghanistan are the worst performing in climate resilience, as are countries in Sub-Saharan Africa and South Asia. The majority of higher income economies are considered low risk, high readiness countries.
This year's report reveals that poorer countries face double jeopardy when it comes to climate change: a higher risk from the negative impacts of climate change and a lower capacity to implement climate-ready policies and institutions.
Learn more about the CRI and how each country performed by accessing the comprehensive online tool through this link.
1All uses of the word 'country' or 'countries' in the 2019 Change Readiness Index (CRI) refers to both countries and jurisdictions. The term country is used for brevity.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 153 countries and territories and have 207,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
The Change Readiness Index (CRI) (view the online tool) covers 140 countries and jurisdictions. The CRI is structured around three pillars (Enterprise capability, Government capability, People & Civil Society capability), that signify a country's underlying ability to manage change. The CRI is built on extensive research and analysis, from primary source data and from more than 1,400 experts and secondary sources including the World Economic Forum, World Bank International Monetary Fund and United Nations. For more information on the methodology please visit the Change Rediness site.
France Iris Lu,
Head of CSR & Sustainability Services, KPMG Denmark